The business community played a crucial role in securing the historic Paris Agreement, by convincing negotiators and governments that if they were ambitious, business could “fill the gap” on climate action, says Rachel Kyte, CEO of Sustainable Energy for All (SE4All) and Special Representative of the UN Secretary-General, in an exclusive Climate TV interview ahead of the Business & Climate Summit 2016.
The high-level international Summit, which will take place on June 28-29 at the London’s iconic Guildhall, the home of the City of London, will convene more than 1,000 leading global CEOs, investors and politicians to support and discuss enhanced climate action.
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The climate challenge for business today is to “keep pushing government, to translate that global agreement into national policy frameworks”, continues Rachel Kyte, “which really encourage business to do the things that are necessary.”
One of the most important actions for business is transforming the way they use energy, she explains. “We need a revolution in energy efficiency. That requires good, strong policy frameworks from government, and then business will have to innovate to fill that space. I think this is entirely possible, but business has to keep its foot on the pedal.”
Energy efficiency, often called the ‘fifth fuel’ because it’s the cheapest and cleanest option available, is key to reducing greenhouse gas emissions and will play a central role in climate policies of the future. But for businesses, energy productivity – which is about getting more economic output from each unit of energy – makes even more sense.
ENERGY EFFICIENCY AND PRODUCTIVITY
In fact, doubling energy productivity in the US alone by 2030 will save US$327 billion a year in energy costs, add 1.3 million jobs and reduce CO2 emissions 33% by 2030.
Last April, The Climate Group launched the EP100 campaign, which is helping leading companies to achieve this bold, economically sensible and environmentally sustainable goal to double energy productivity.
From the perspective of SE4All, “we would look very clearly at the need for efficiency first,” continues Rachel Kyte. “Once one has efficiency, then we can look at what the new forms of power generation [there] should be.”
“Those companies that are able to be competitive with much less resource throughput are going to be in a much better position,” she underlines.
“There’s a huge opportunity that comes from changing the energy mix, and an enormous opportunity that comes from embracing distributed power alongside centralized power, in order to meet the needs of everybody much sooner than we’ve even said that we should – because the growth that we see going forward has to be an inclusive growth.”
VALUE OF COLLABORATION
The Climate Group’s EP100 campaign is just one of the many examples of such opportunities for business leaders and policymakers to collaborate for the more sustainable, prosperous world indicated by the Paris Agreement. “The direction of travel is very clear,” confirms Rachel Kyte.
“I think that at the Business & Climate Summit what we hope is going to happen is that we take the conversation down from 64,000 feet, to what does this take, what is the re-engineering within companies that seems to work, and what is the public-private dialogue at the national level, at the city level, at the community level, that is needed in order to push things forward.”
To accomplish these bold objectives, “we’ve got to help government set up policy frameworks which will accelerate change,” says Rachel Kyte. “Business needs to talk to each other about what’s working and what’s not, and frankly needs to benchmark itself against others and drive for that competitive space. That competitive win is going to be about being resource-efficient.”
Ensuring access to affordable, reliable, sustainable and modern energy for all is not only an economic, environmental and human development objective – it is also the seventh Sustainable Development Goal (SDG7) of the United Nations. The objective of SDG7 is to close the energy access gap, double the amount of renewables in the global energy mix and double the improvement rate of energy efficiency in the energy system by 2030.
“At SE4All we believe that the three goals are inextricably linked, and all three can be achieved,” says Rachel Kyte. “We put a premium on closing the energy access gap, because in Paris we said we’d leave nobody behind. We said the same thing when we agreed the Sustainable Development Goals, and equity has to be built into this economic transition; it can’t be a green economy that just works for 1% [of the global population].”
“We believe that we can meet the energy access gap earlier,” says Rachel Kyte, “and that we can do that because of the revolution in technology, which allows us to have appliances which are super-efficient – so we need less power to people, in order to be able to give them [energy] access.”
“At the same time, renewables make it possible that we can extend power in a clean and affordable way. Of course, we need a revolution in efficiency if we’re going to have a reliable energy system that is clean and is affordable – but which is also one that allows us to come in at well below 2 degrees [Celsius], which is what we agreed in Paris.”
BUSINESS LEADING ROLE
Rachel Kyte says that while these important goals are focused on improving people’s lives, it is business that could accelerate progresses in the next five years. “We believe that it is business that is already leading,” says Rachel Kyte, “and that [it is] business that needs to concentrate policymakers minds and what they have to do in order to unleash the possibilities from the new business models in the new technologies that we see.”
To achieve inevitable energy transition we need “to build an energy system that actually meet people’s needs,” she says, “that’s clean, affordable and reaches everyone, and that allows us to come in well below 2 degrees [Celsius]. In order to achieve that, it is necessary a synthesis of technology, finance and policy.”
The technological advances are already substantial: the price of renewables, for example, dropped more than 75% in the last few years, and businesses are already grasping this opportunity.
“The technology is kind of there,” concludes Rachel Kyte, “and we think the policy and finance have to catch up. Policy is an accelerant; getting the policy right will allow some of the really good things that are happening to go to scale, and then the finance can follow behind good, smart policy.”
“Business has a role in telling government what policy works for it, and being a partner across the table for smart policymaking.”
SE4ALL are organizing two parallel sessions on June 28th at the Guildhall. See the Summit Programme to find out more.